Gospić is the third smallest seat of a county government in Croatia. Its status as the county capital helped to spur some development in it, but the town as well as the entire region have suffered a constant decrease in population over the last several decades. Gospić is notable for being the birthplace of Nikola Tesla.

The first organized inhabitation of the area was recorded in 1263 as Kaseg or Kasezi. The name Gospić is first mentioned in 1604, which likely originates from the Croatian word for "lady" (gospa) or another archaic form, gospava.

Today's town was built around two Ottoman forts (the towers of Aga Senković and of Aga Alić). The Turkish incursion was repelled by the end of the 17th century and Gospić became an administrative centre of the Lika region within the Military Frontier.

Gospic is also the site of one of the regional branches of the Croatian State Archives, the Državni arhiv Gospić, at Kaniška 17. It was founded 30 September 1999 and officially opened 1 September 2000 in a renovated building and now houses historical documents of relevance to the Lika-Senj region which were formerly housed in the Regional Archive at Karlovac.

Gospić has a humid continental climate, Dfb by Koppen climate classification, with mean temperatures varying from −0.9 °C in January to 18.1 °C in July. Being situated higher than 500 m above sea level, the area experiences high diurnal ranges, especially in summer, and frost has been recorded in every month except for July. The record low and high temperatures are −33.5 °C and 38.7 °C, respectively. Gospić is also quite a rainy city, with a slight summer minimum, but it experiences plentiful precipitation all year long, with the maximum being in autumn. During winter, Gospić can get strong blizzards, with on average 5.1 days a year when more than 50 cm falls, and 16.1 days when more than 30 cm falls. Its record snow cover was 285 cm, and it was measured in February 1916.